Boeing said Wednesday that it would cut 5,500 more jobs but that the number of positions axed in its Commercial Airplanes division won’t go beyond the 4,500 the company announced earlier this year.
CEO Jim McNerney said during Boeing’s quarterly conference call with analysts that the company will cut 10,000 jobs this year to save money. The company also reported a loss for the fourth quarter.
“The global economy continues to weaken and is adversely affecting air traffic growth and financing,” he said. “We are also expecting pressure on defense budgets in light of the economic recovery and financial rescue packages put forth by various governments.”
McNerney said an additional 5,500 positions would be slashed in other parts of the company. Some of those workers could be in Washington. Boeing has other divisions in the Puget Sound area, including significant operations by the defense and shared services divisions, but the Commercial Airplanes operation employs the great majority of Boeing workers in this area.
The company didn’t detail where cuts would be made. Some could come from retirements or attrition.
A 58-day Machinists union strike, delays in the 747-8 development program, and a reserve for litigation losses moved Boeing into the red for the fourth quarter, the company said.
The Chicago-based company reported a loss of $56 million, or 8 cents a share, in the fourth quarter of 2008, compared with earnings of $1.03 billion for the fourth quarter of 2007.
For the full year, Boeing said, its earnings totaled $2.7 billion, compared with $4.07 billion for 2007.
Revenues declined 27 percent to $12.7 billion due in large part to the strike. Boeing delivered 70 fewer airliners than projected because of the strike, which shut down production.
“The progress we made in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs,” McNerney said.
The company also took losses because of delays in the development of its 747-8, the successor to the 747-400. Many engineers who had been assigned to the 747 were diverted to work on the oft-delayed 787 Dreamliner, thus pushing out delivery of the first 747-8 into the third quarter of 2010.
The 747 delay was estimated to cost 61 cents a share in earnings.
Boeing reported that one customer with deliveries of its 787s scheduled for late in the next decade had canceled its orders, reducing the 787 order book backlog to 895 planes.
The company’s defense side was solidly profitable with operating margins of 11 percent in the fourth quarter.
The company predicted earnings of $5.05 to $5.35 a share for 2009, below some of Wall Street’s expectations. Boeing said it will deliver between 480 and 485 commercial airplanes this year, somewhat below an earlier forecast.
Analysts polled by Thomson Reuters, on average, expected earnings of 78 cents in the fourth quarter. Those estimates typically exclude one-time items.
JSA Research analyst Paul Nisbet said the results were “surprisingly poor,” noting the unexpected charge for the 747-8 jets.
John Gillie: 253-597-8663
blogs.thenewstribune.com/business
The Associated Press contributed to this report.
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